Why Big Dividend Growth Awaits Reynolds American

Reynolds American tobacco has officially acquired Lorillard and now owns Newport, one of the strongest brands in the tobacco sector that has industry leading profits in the menthol sector and has maintained volume shipments even while the tobacco-smoking industry as a whole shrinks by 3.5% annually in the United States.

The addition of Newport has greatly increasing the per share earnings power of the company even after adjusting for dilution resulting from the acquisition. Before the transaction, Reynolds had 530 million shares outstanding and was earning $2.70 per share, or $1.4 billion in net profits.

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